SOUTH AFRICAN PAYROLL ASSOCIATION

1 SOUTH AFRICAN PAYROLL ASSOCIATION CONFERENCE5 -6 AUGUST 2015 Feb 2015 Recon Submissions ETI Errors: EMP201 errors EMP501 errors Finding on investigation of ETI claims ETI Refund Claims Overpayment of Remuneration Cancelling and replacing IRP5/IT3(a) s Under and Over deduction of PAYE Severance Benefits Retirement Fund Reform Changes 2016 Interim Recon (201508) September/October 2015 QuestionsAgendaFeb 2015 Recon Submissions31 /05/201531/07/2015 AdditionalEMP501 (ER s)249 906275 01425 108 IRP5/IT3(a)17,1 m18,0 m0,9 mDue To/By ER sR 643,1 mR 2 146,5 mR 1 503,4 m Total EMP501259 695296 81237 117Re-Submissions9 789 21 79812 009 Total IRP5/IT3(a)18,2 m20,1 m1,9 mRe-Submissions1,1m1,9 m0,8 mFeb 2015 Recon SubmissionsSubmission ChannelRecons%IRP5/IT3(a)%E@syFilevia eFiling252 06691,617,078 m94,89E@syFile Disk1 4610,50,858 m4,76eFiling19 4097,10,061 m0,34 Total Electronic272 93699,217,997 m99,99 Manual2 0780,80,001m0,01 TOTAL275 01410017,998 m100<1000 EMP201 Revised declarations for previous months to claim ETI ETI Calculated not Utilised to reduce PAYE payable ETI Brought Forward ETI Carry Forward for previous month EMP501 ETI Refund claimed without utilisation where utilisation possible ETI not Utilised claimed in later month s Brought Forward amount Findings on investigation of ETI claims [IRP5/IT3(a) detail] Employee employed before 1 Oct 2013 Employee fall outside age restriction Employee remuneration R 6 000 per month Employee paid less than minimum wage/R 2 000 (where no min wage)

2 ETI Errors ETI Refund claim = ETI not Utilised on EMP501 Update Bank Account detail EMP201 Compliance requirements Employer may not utilised ETI if not compliant on last day of month Compliant = No outstanding returns and debt for all taxes! EMP501 Compliance Requirements ETI refund will not be paid if employer not compliant Employer has until end of next recon period to become compliant ETI Refund forfeitedif still non-compliant at end of such next recon period!ETI Refund ClaimsOverpayment of Remuneration If in same year rectify on EMP 201, IRP5 and EMP501 If in earlier year-Issue letter to employee -Do not revise your PAYE declarations Amount is deductible in ITR12 in terms of Section 11nA of the ITA amount refunded Incorrect IRP5/IT3(a) s can beamended from 2010 Replacementnot necessary Amend EMP501if Tax Credits, UIF or SDL contributions are amended Re-submitrevised documents to SARS Provide amended IRP5/IT3(a) to employee(s) Employee (taxpayer) to resubmit ITR12 or if not possible, submit NOO with amended ITRP5/IT3(a) detailCancelling and replacing of IRP5/IT3(a) s Under deductions (< than what should be withheld) To be corrected & shortfall paid to SARS for relevant month(s) penalty and interest If IRP5/IT3(a)

3 Correct, SARS may absolve employer to pay shortfall if SARS is satisfied that ofailure to deduct correct PAYE not due to intent to postpone or evade obligation, andocollection of tax by SARS from taxpayer is possible. Over deductions by Employer (> than what should be withheld) May be refunded by employer , provided IRP5 & EMP501 correct (in Year) When over-deduction is realised Revised declaration (EMP201, EMP501 & IRP5)Under or Over deduction of PAYE Any lump sum from an employer to a person irothe termination of person s employment, if person - is 55 years or older became permanently incapable to be employed due to sickness, etc. or services terminated due to reduction of personnel or employer ceased trading Severance Benefit excludes Leave Pay, Bonusor Notice Pay Severance Benefit directive application may not include leave pay, bonus or notice pay Reason for Directive different!

4 IRP5/IT3(a) income source codes also different! Severance Benefit= 3901 Leave Pay & Bonus = 3605 Notice Pay = 3601 IRP5/IT3(a) to be issued within 14 daysSeverance Benefit Effective date (itocurrent legislation) = 1 March 2016 Employer contributions becomes a taxable fringe benefit Par12D, Seventh Schedule calculations Differentiated calcwhere employee benefits from a fund consists osolely of define contribution components, andocomponents other than only define contribution components Taxable benefit becomes deemed employee contributions Deduction (limited to new max) = actual + deemed employee contributionsRetirement Fund Reform Changes IRP5/IT3(a) source codes New Employer contribution codes (4472, 4473 & 4475) New Fringe Benefits codes ( 5 to 7 in 38range, no s not fixed yet) Revised descriptions for certain existing codes (4001, 4003 & 4006) Dis-continuation of certain existing codes (4002 & 4007)

5 New maximum deduction for contributions to a retirement fund Total deduction limited to LESSER of -oR 350 000, of the HIGHER of Remuneration, or Taxable Income before retirement fund contributions Correct Fringe Benefit calcimportant -affect c/o amounts for Annuity exemptions (s10C), future s11(k) & Lump Sum deductionsRetirement Fund Reform Changes September / October 2015 Changes (BRS) Appendix E Address Structure Appendix F Country Code Certain source code descriptions (clarity) No e@syFile changes No form (EMP501) changes2016 Interim Recon (201508)QUESTIONS?